More than 50 dairy organizations in urging inclusion of Dairy Security Act in farm bill

Farm bill mark-ups set for the week of May 13.
Dairy organizations press House to include Dairy Security Act.

The National Milk Producers Federation | May 09, 2013

More than 50 state and national dairy organizations, including the National Milk Producers Federation (NMPF), sent a joint letter on May 8 to members of the House Agriculture Committee, urging that panel to include the Dairy Security Act (DSA) in the upcoming farm bill. The House panel is expected to begin drafting a farm bill May 15.

The letter said that dairy producers need, “a financially-sound risk management program to help farmers better manage margin volatility,” noting that the economic conditions that led to the development of the DSA after the dairy depression in 2009 -- low milk prices and high feed costs generating terrible margins -- were experienced again by America’s dairy farmers last year, when feed costs soared to record levels as milk prices dropped.

The coalition’s letter -- signed by 52 separate organizations -- urged House members to oppose a competing proposal to be offered by Virginia Rep. Bob Goodlatte and Georgia Rep. David Scott, the “Dairy Freedom Act,” because it would weaken the safety net for farmers in order to benefit dairy processors. The Dairy Freedom Act strips out the market stabilization component from the DSA.

The letter says, “Without the discipline offered by market stabilization, low milk prices will continue for longer periods. This is detrimental to farmers. Low milk prices will lead to more government outlays. This is detrimental to taxpayers. The Dairy Freedom Act is supported by processors precisely because it offers them the prospect of lower milk prices, subsidized by government insurance payments. This scenario is not sustainable. Free margin insurance alone is a costly ruse.”

The farm groups assert that, “Market stabilization sends a clear signal to farmers participating in this program that a bit less milk is needed. Not only does this hasten a rebound in low-margin situations, it reduces the cost of the program to the government.”

The joint letter points out that, “The real threat to the growth of our domestic dairy industry is not a market stabilization program that will only rarely activate; it’s the further damage to our dairy producer sector that would result from an ill-conceived processors’ dream plan to assure themselves a sea of taxpayer-subsidized milk.”

Also, the letter notes, the DSA is “a voluntary approach to risk management, which offers producers the choice to participate.”

“The U.S. dairy industry is demonstrating a level of unity and support for the Dairy Security Act that is unprecedented for our industry. These organizations share the belief that the status quo is not an option for our future, and we stand united behind the Dairy Security Act as a rare opportunity for the dairy industry to collectively support reasonable, financially-sound changes to our Federal policies,” said the letter.